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FPIs Flee Indian Markets: IT Stocks a Rare Haven
23 Oct
Summary
- Financial services saw the highest FPI outflows of ₹8,634 crore.
- FMCG and auto stocks also experienced significant selling pressure.
- IT stocks bucked the trend, attracting ₹2,599 crore in inflows.
In the first half of October, foreign portfolio investors (FPIs) significantly reduced their holdings across various Indian market sectors. Financial services bore the brunt of this sell-off, with outflows reaching ₹8,634 crore. Following closely, the FMCG and automobile sectors also experienced substantial divestment, seeing outflows of ₹8,172 crore and ₹6,533 crore, respectively. This trend extended to healthcare and telecom stocks, which recorded outflows of ₹5,497 crore and ₹3,928 crore.
Several macroeconomic factors contributed to this cautious investor sentiment, including rising US Treasury yields, elevated crude oil prices, and currency uncertainties. Market analysts noted that Indian financials, consumption, and auto sectors faced scrutiny regarding their earnings growth, funding costs, and valuations. Despite the broad market retreat, the information technology (IT) sector presented a contrasting picture.
IT stocks attracted FPI inflows totaling approximately ₹2,599 crore during the early October period. This buying interest in IT shares marked a positive shift after previous months of selling. Investors found value in Indian IT companies as their valuations approached or fell below long-term averages, with some firms reporting encouraging financial results.
